News Nuggets – February 2019

Bay Area

San Francisco Limits Dispensary Chains to Four Locations

The San Francisco Board of Supervisors unanimously voted on Dec. 11 to approve a large package of cannabis regulations, including one that limits dispensary chains to four retail permits within city limits. “We all want to prevent chain stores from gobbling the industry up,” Supervisor Aaron Peskin said before the board’s vote. Peskin added the four-permit limit to a larger amendment package that was sponsored by Supervisors Malia Cohen and Rafael Mandelman. The limit will only apply to new applicants, as existing dispensaries will be grandfathered in. Among other changes, temporary dispensary permits will be valid for an additional year, and other protections were added for medical cannabis dispensaries that lose their leases for storefront properties. San Francisco leaders are generally unfriendly to large monopolies and gentrification, and the same logic applies to dispensaries.

Martinez City Leaders Tour Local Dispensaries

On Jan. 16, members of the Martinez City Council and Planning Commission gathered together to tour two local dispensaries, listen and observe. They will visit Vallejo Holistic Health Facility and Re-Leaf dispensaries, both located nearby in Vallejo. “This will be an off-site tour of two commercial cannabis businesses,” the Jan. 16 Planning Commission agenda read. “The meeting will be called to order in the Council Chambers and then the attendees will board vehicles and be transported to the two locations listed below at approximately the times listed.” The city leaders are currently drafting cannabis regulations and weighing their options. The original plan for cannabis regulations in Martinez was to allow two retail stores, two delivery companies, a manufacturer, distributor and a testing lab. But first, city leaders want to assess how well cannabis regulations are working in adjacent cities and how they could do things similarly.

Colorado

Colorado Recreational Cannabis Sales Reach New Heights

Colorado cannabis sales in 2018 surpassed sales in 2017, despite a brief decrease that took place from September through November that same year. According to the Department of Revenue’s Marijuana Sales Report, recreational and medical sales combined totaled a little over $5.9 billion and is approximately a $1.5 billion increase from 2017, which totaled approximately $4.5 billion. As of July 2018, Colorado hit record-breaking sales, but soon saw a decline over the last few months of the year. On an individual level, recreational sales didn’t quite hit the $100 million mark, and medical sales reached approximately $26 million. November’s revenue was the lowest since May, but November 2018 sales still surpassed sales collected in November 2017, according to the Department of Revenue. In terms of most successful cannabis products, concentrates and edibles made the most sales. Many dispensary locations in Colorado have shut down the medical side, focusing only on recreational cannabis, which could be a reason for lower medical sales.

State Opens Up Possibilities for Hemp Internship

Those working toward a career in the agricultural workplace now have the option to intern on farms and ranches, according to a statement issued by the Colorado’s Department of Agriculture (DOA). Thanks to the recent passing of the Farm Bill, the Agricultural Workforce Development Program will include hemp farms, which means those who are aspiring to become hemp farmers can now get real life experience and guidance from established hemp farmers in Colorado. The program entices business owners to participate by offering reimbursement of up to 50 percent or $5,000 of what it would cost to hire the intern, says the official DOA statement. Businesses that want to get involved in the intern program must submit their applications by Feb. 15. Those who are participating must also facilitate a “focused learning opportunity” for interns who will earn at least minimum wage. The program was born during the 2018 Colorado General Assembly by the Young and Beginning Farmers Interim Study Committee and is intended to help create more jobs and boost hiring in the farm industry.

Los Angeles

Moreno Valley City Council Increases Limit on Dispensaries

The Moreno Valley City Council voted 3-2 on Dec. 11 to increase its limit on dispensaries from eight to 23. It’s a respectable number for a city with a population of nearly 210,000 people. While few cannabis businesses are currently in operation, provisional permits have been granted to 17 applicants who are in the process of opening a legal dispensary. Councilmembers Victoria Baca and David Marquez strongly opposed the increase. “It’s just going to be like pizza places,” Marquez said at the meeting. “We have a pizza store on every corner in Moreno Valley. What are we going to do? Have a dispensary on every corner now?” Other members of the Moreno Valley community also worry that the number is too high, however, the recently elected Councilmember Carla Thornton tipped the scales in favor of expanding the city’s number of dispensaries.

Los Angeles Department of Cannabis Regulation Posts Updates

On Jan. 8, Los Angeles’ Department of Cannabis Regulation (DCR) posted updates to its Phase I licensing process, which includes a fee to renew Temporary Approvals. “Later this month, DCR will issue all eligible Phase 1 Priority Processing Applicants and Testing Lab Applicants an invoice to pay their annual renewal fee(s),” the department posted. “The renewal fee is $4,030 per commercial cannabis activity. Once the invoice is paid at the Office of Finance, one of the applicants owners may come to DCR’s office to pick up the renewed Temporary Approval document(s), which will be valid through the end of 2019.” The annual renewal fee is the only way to avoid visits from state licensing agencies. Failure to pay the renewal fee will cause the Temporary Approval to expire, which the DCR will notify authorities. On Jan. 22, the DCR held a workshop for businesses that are eligible for Phase I applications.

Michigan

Michigan Authorities Issue First Cannabis Recall

On Jan. 4, the Department of Licensing and Regulatory Affairs (LARA) issued a recall on products made using cannabis originating from Choice Labs, LLC. The cannabis was recalled because it wasn’t properly tested—not because it was necessarily unsafe. “Patients or caregivers who have these affected medical marijuana products in their possession should return them to the provisioning center from which they were purchased for proper disposal or retesting,” the department stated in a news release. The company will not, however, face fines or disciplinary action because the problem may have been caused due to a processor input error or an error involving the state’s new tracking system. Affected products include Mary’s Transdermal Indica patches, The Remedy Tincture-Mary’s, Mary’s Transdermal Patches CBD, The Coltyn 1:1 Tincture and Mary’s Transdermal 1:1 Patches. Patients who already bought the products are advised to return them.

Jackson Increases Limit on Cannabis Businesses

The Jackson City Council approved the second reading of Ordinance No. 2018-13 on Dec. 11, raising the number of potential cannabis businesses in the city from six to nine. The list includes three provisioning centers, two cultivation facilities, two safety compliance facilities and two secure transporters. “Instead of allowing six medical marijuana business licenses, the city will approve up to nine. It’s clear that the voters have spoken,” Mayor Derek Dobies said. “They want us to move forward with this process. We’ve taken a couple weeks to continue to review between first reading and second reading.” City officials agreed that there is enough space in industrial and commercial zones to accommodate a larger number of businesses. As in other cities, provisioning centers must observe 1,000-foot buffers around schools, day care centers and other sensitive areas.

Oregon

Oregon Officials Adopt Rule Changes for Hemp and Cannabis Operators

The Oregon Liquor Control Commission (OLCC) announced a handful of changes on Dec. 20 for recreational cannabis and hemp processors and producers. In addition, the commission increased the limit for medical cannabis cardholders, enabling them to purchase up to eight ounces of cannabis per day and 32 ounces per month. Most of the changes surrounded tightening up compliance rules for recreational cannabis business owners such as clarifying camera coverage, canopy requirements and licensing rules. The commission also chose to allow hemp processors to continue operation until they receive permanent licenses. “The Commission approved a temporary rule that enables industrial certificate holders (hemp producers and handlers) to continue to operate while the commission completes its permanent hemp rule making,” the commission stated. The permanent hemp operator rules are expected to be completed sometime in February 2019.

Oregon Harvests Over One Million Pounds of Usable Cannabis

Oregon cannabis cultivators harvested over 2.5 million pounds of “wet” cannabis, which translates to 1.3 million pounds of usable cannabis once it’s dried and trimmed. The latest report from Oregon’s Metrc Cannabis Tracking System was released on Dec. 7, 2018. “The market trend data should be considered a ‘snapshot in time’,” the Oregon Liquor Control Commission stated on its website. “This data from the Oregon Liquor Control Commission is produced from Metrc, Oregon’s Cannabis Tracking System, based on information entered by licensees.” Because of the sheer amount of cannabis that was harvested, the state is facing a huge overabundance of product for the second year in a row. The state is home to four million residents, but has licensed 1,107 active producers, with 900 more people attempting to receive licenses to grow or process cannabis. The overproduction of cannabis led to major discounts at the retail level that everyday consumers will see at the counter.

San Diego

Sixteen Applicants Apply for Cultivation Licenses in Oceanside

As of Jan. 21, 16 Oceanside residents have applied for one of the five cultivation licenses that are currently available. Applicants must complete four phases of the application process, starting with a preliminary determination of eligibility. Phase 1, the determination of eligibility, costs $3,471, the city website states. Phase 2, the ranking of applicants, costs $2,448. Phase 3 contains a detailed ranking system and Phase 4 is a review and potential approval by the City Manager. The city processes the applications about every three months. Beyond that, applicants also need to obtain a conditional use permit, costing them an $8,000 deposit. There are several other fees and start-up costs to consider, easily topping $11,000. Business people with serious intentions and a little money in the bank can finally move forward with cultivation licenses. Additionally, more have applied for manufacturing, distribution and testing licenses as well.

California Office of Administrative Law Approves Cannabis Regulations

On Jan. 16, three California state agencies, the Bureau of Cannabis Control, California Department of Public Health and California Department of Food and Agriculture, announced that the state’s Office of Administrative Law approved a bundle of final cannabis regulations, covering the entire supply chain, from cultivation to retail. Leaders spent time gathering input before implementing the rules. “These approved regulations are the culmination of more than two years of hard work by California’s cannabis licensing authorities,” Bureau Chief Lori Ajax stated in a press release. “Public feedback was invaluable in helping us develop clear regulations for cannabis businesses and ensuring public safety.” Cannabis-related business owners throughout California have been waiting patiently for years for the rules to be finalized. Before then, emergency regulations were implemented in 2017 and readopted in June 2018, but no rules were finalized. The new permanent rules take effect immediately.

Washington

Washington Legislators Plan for Federal Legalization

With 2019 underway, Washington’s cannabis industry is in the process of preparing itself for potential federal legalization. The Washington State Liquor and Cannabis Board (LCB) recently expressed support of legislation that would support this. “Most states that have legalized cannabis have vertical integration in some form,” LCB Board Chair Jane Rushford told CULTURE. “Many of the smallest producers have been seeking ways to make their business better able to compete in the marketplace. This is very similar to what we heard from small wineries several years ago. Vertical integration has been suggested as one way to help small growers. The 2019 legislative session began [Jan. 15]. It will take a change in the law to make this change possible.” If small farmers were allowed to sell their own products on their farms, similar to how wineries sell their own wine on site, and other farmers have farm stands, that would open up a whole new market. Cannabis advocates, small farmers and regulators will be watching closely to see if this type of legislation is brought forth in 2019.

Youth Cannabis Consumption Decreases in Washington

A recently published study entitled “Prevalence of Cannabis Use in Youths After Legalization in Washington State” states that cannabis consumption in Washington teens has decreased between during 2014 and 2016. Compared to data from 2010 and 2012, cannabis consumption in eighth graders fell from 9.8 percent to 7.3 percent. Cannabis use in 10th graders fell from 19.8 percent to 17.8 percent. No changes were reported for 12th graders. While this is just one study, and far from conclusive, it is promising news for cannabis advocates and anyone interested in preventing underage cannabis consumption. “Kids don’t care about what happens in the state capitol, they care about what happens in their own neighborhoods,” Rosalie Liccardo Pacula, co-author of the study and co-director of the RAND Drug Policy Research Center said. “Commercialization in local neighborhoods is likely to be more important than changes in the law.”

National

Thailand Legalizes Medical Cannabis

On Dec. 25, members of Thailand’s parliament voted unanimously to approve medical cannabis for medical use and research. Patients suffering from chemotherapy, multiple sclerosis, Parkinson’s disease, epilepsy or chronic pain can obtain permission to consume medical cannabis. “This is a New Year’s gift from the National Legislative Assembly to the government and the Thai people,” said Somchai Sawangkarn, chairman of the drafting committee. It’s a big deal for Thailand, which typically imposes an extremely harsh stance on drug offenders, sometimes invoking the death penalty. It’s not uncommon, however, for police to frisk you and force you to urinate in a cup right on the street without trial to determine if there are any drugs present. Visitors are still urged to consume medical cannabis in private, even if they have permission. The country also legalized the plant kratom for medicinal use.